FinanceHaines Watts

90% of eligible companies are not claiming tax credits


Are you missing out on tax credits? With an average of £50,000 saved, this is an area that you should look into...

90% of eligible companies are not claiming tax credits

R&D tax credits have been around for a while now and yet HMRC studies suggest that as many as nine out of ten businesses who are actually eligible for the relief, aren’t claiming it.  When you consider that the average claim for an SME is around the £50,000 mark – so that’s £50,000 of corporation tax saved or a £50,000 refund, it’s a very valuable relief for small businesses to be missing out on.


Why do we think businesses are missing out? One, is they just don’t know that the relief is there or they do know that it’s there, but they’re not claiming enough. They’re not looking into the breadth of projects that would qualify.


The other reason is the complexity around HMRC’s guidance. There’s quite a lot on there if you look into this and it’s time consuming to understand, decipher and pull a report together.  It puts business owners off. The other thing is literally just not understanding or not thinking that what you do is research or innovation.


A couple of examples of companies who you may not automatically think are eligible for this relief that we’ve worked with are a digital creative agency where they’re creating apps and websites for clients and architects – not for the plans or the drawings, but for the use of sustainable or energy efficient materials in those builds.


What I would suggest is if you’re doing anything which is solving problems – whether they’re your own problems or whether they’re the problems of your clients – then you need to have a look at this relief and I would suggest you need to talk to a research and development tax professional.  They’ll have the breadth of knowledge of the different claims that are going through.  Most of them would have contacts at HMRC and can really help to streamline the process for you.

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